View Full Version : Wishful Thinking 101: Can We Talk About the Deficit Now?
I know, I know, I'm a silly little prosimian for thinking that anyone's going to give a hoot about debt, but who knows? Maybe in the new two-party Washington, people might actually pay attention to our outrageous deficit?
Good editorial (http://www.jsonline.com/story/index.aspx?id=527931) today in a local paper:
Walker is the nation's comptroller general - basically America's top accountant. And he speaks with all the fervor of an evangelist on his favorite topic: the coming train wreck that is federal finances.
If our government simply keeps conducting business as usual, he argues, our national obligations will grow far larger than the output of the country, creating a gigantic fiscal hole that could cripple the economy.
"In my view, the greatest threat to America's future isn't hiding in a cave in Pakistan or Afghanistan; it's right here at home," he told an audience in Minneapolis last month.
[snip]
Overall, the total U.S. fiscal burden - that's all of the federal government's liabilities - soared from about $20 trillion in 2000 to about $50 trillion today, according to the GAO. That's about $440,000 for each American household.
What do the Orgahs think? Is there even a vague chance that the new Washington might reign in spending? Or will the big-government wing of the G.O.P. embrace the big-government wing of the Democrats and make sweet love all night long?
Sasaki Kojiro
11-08-2006, 22:32
Oh, not the hockey stick again! What people don't realize is that there is a natural surplus/deficit cycle.
Don Corleone
11-08-2006, 22:36
Well, the reason I'm a Republican in the first place is because I'm fiscally conservative, so I've been incredibly underwhelmed these past 6 years. There are some good defecit hawks among the Democrats, but none are being pointed to for leadership roles.
As I understand it, the House leadership is going to be Rangle, Waxman, Dingle and Conyers (and of course Pelosi, and whomever wins the House majority election).
Here's an article from the Washington Post (http://www.washingtonpost.com/wp-dyn/content/article/2006/10/31/AR2006103101101.html?nav=rss_politics) on this:
House Democrats Propose More Spending for Military and Education
GOP Says Plan Would Imperil Efforts to Balance Budget
By Jeffrey H. Birnbaum and Jonathan Weisman
Washington Post Staff Writers
Wednesday, November 1, 2006; Page A07
As part of their midterm election push, House Democrats are promoting a wide-ranging legislative agenda that would add tens of billions of dollars a year to the federal budget for the military, homeland security and education yet still impose a new budget restraint that would make it harder to widen the annual deficit.
Republicans and budget experts doubt that Democrats could do both simultaneously. When price tags are attached to their six-pronged agenda -- named Six for '06 -- critics say the Democrats will be forced to choose between keeping their pledge of fiscal rectitude and their promises of federal largess.
In short, the promised 'pay as you go' financial conservatism you and I are looking for??? :no: :no: :no: :no: :no: :no: :no: :no:
And when exactly are we supposed to be in the surplus part of that cycle again? 'Cause it's been a while ...
House Democrats Propose More Spending for Military and Education
GOP Says Plan Would Imperil Efforts to Balance Budget
The first line is depressing. The second line is hilarious. If Don C is lost in a German art film, this headline makes me feel like I'm wandering through a piece of Dada experimental theater ....
rory_20_uk
11-08-2006, 22:44
I thought that in both relative and absolute terms the current deficit and indeed national debt are breaking records.
On the news it was saying that when there is a bipartisan set-up, spending usually decreases (probably just as it ends being a logjam).
~:smoking:
Don Corleone
11-08-2006, 22:48
The Six in 06 and what they'll do to the defecit: Here's what the Democrats say they'll do (http://www.housedemocrats.gov/news/librarydetail.cfm?library_content_id=780)
To be fair, if the Democrats would repeal the 'no-negotiation' clause the Republicans put into Medicare Part D, they could reduce the burden on seniors for prescriptions AND reduce the congressional expenditure. I doubt they will have much success though.
Raising the federal mininum wage won't cost Congress anything directly, but it will slow the economy and reduce revenues available to tax.
Ending exploratory money for oil companies will definitely reduce the money Congress pays out each year, but it's going to raise the price of gas.
All the rest are giveaways: more money in Pell grants, stem cell research money, no privitization of Social Security (translation, Congress is going to fund everybody's retirement directly, without trying to employ investment strategies).
yesdachi
11-08-2006, 22:52
Read my lips, lots more taxes! ~D
Our “new” government is going to have to come thru on some of them promises they made to get elected and that is going to mean more spending. Maybe in a few years we will start to curb spending, after the “new” government solves the Iraq issue the next big issue for most people is $$$, it will become an issue but not until tomorrow.
Sasaki Kojiro
11-08-2006, 22:53
I don't see why Pell grants are any different from tax cuts. I have one, and you can bet I'm spending more money than I would if I didn't. Surely they help the economy.
Don Corleone
11-08-2006, 22:56
The scary thing about 'more money for education'? There's relatively little correlation between the amount of money spent per student and how well students do in school. If more money actually worked, I would actually support it. But Western states (Utah, Colorado, New Mexico) spend less per student than Southern states (North Carolina, Alabama) but they do markedly better. States in the Northeast have not kept up in growing the per-student spending, falling to the upper third from the top, but their test scores remain top of the list.
The problem with education in America is the NEA. Plain and simple. They don't want to require teachers to do their jobs, and incompetent teachers get rewarded along with the good ones (and there's plenty of those). Add to that so much class time is taken up with enacting social policy these days, it's very hard for teachers to actually teach.
Quit with the "social experiments" like the schools out in California making kids pretend to be Muslims for a month, and teach the 3Rs.
I understand what Dems say about standardized tests, that in the end, kids learn how to take a standardized test, not a real education. But by any yardstick, we are failing our children miserably, and if vouchers aren't the answer, fine, propose one. But "let's just give the schools more money and hope the problem goes away" is a recipe for more failure. If schools really need more money, then lay it out and explain how it will improve student performance. But don't just handwave with 'more money for education'.
Read my lips, lots more taxes! ~D
Our “new” government is going to have to come thru on some of them promises they made to get elected and that is going to mean more spending.
Oh give it a rest. If we froze all spending tomorrow, a tax hike would still probably be necessary. It took the Republicans exactly six years to take our unfunded liabilities (translation: money we owe that we don't have) from $20 billion to $50 billion. I am completely unimpressed with any G.O.P. whining about fiscal responsibility at this late date.
With a divided government, at least we have a chance to rein in the beast. Let a lemur hope a little, okay?
Sasaki Kojiro
11-08-2006, 23:01
The scary thing about 'more money for education'? There's relatively little correlation between the amount of money spent per student and how well students do in school. If more money actually worked, I would actually support it. But Western states (Utah, Colorado, New Mexico) spend less per student than Southern states (North Carolina, Alabama) but they do markedly better. States in the Northeast have not kept up in growing the per-student spending, falling to the upper third from the top, but their test scores remain top of the list.
The problem with education in America is the NEA. Plain and simple. They don't want to require teachers to do their jobs, and incompetent teachers get rewarded along with the good ones (and there's plenty of those). Add to that so much class time is taken up with enacting social policy these days, it's very hard for teachers to actually teach.
Quit with the "social experiments" like the schools out in California making kids pretend to be Muslims for a month, and teach the 3Rs.
I understand what Dems say about standardized tests, that in the end, kids learn how to take a standardized test, not a real education. But by any yardstick, we are failing our children miserably, and if vouchers aren't the answer, fine, propose one. But "let's just give the schools more money and hope the problem goes away" is a recipe for more failure. If schools really need more money, then lay it out and explain how it will improve student performance. But don't just handwave with 'more money for education'.
Yeah, but all that shows is that they are either spending money on the wrong things or that standardized tests are a lousy measure. Probably both.
I would imagine that raising teacher salaries would eventually be effective in raising quality of education.
Also, according to Crazed Rabbit, private schools are the best, and what are private schools if not public schools with more money?
yesdachi
11-08-2006, 23:03
Oh give it a rest. If we froze all spending tomorrow, a tax hike would still probably be necessary. It took the Republicans exactly six years to take our unfunded liabilities (translation: money we owe that we don't have) from $20 billion to $50 billion. I am completely unimpressed with any G.O.P. whining about fiscal responsibility at this late date.
With a divided government, at least we have a chance to rein in the beast. Let a lemur hope a little, okay?
i did say...
Maybe in a few years we will start to curb spending
:wink2:
Don Corleone
11-08-2006, 23:07
I don't see why Pell grants are any different from tax cuts. I have one, and you can bet I'm spending more money than I would if I didn't. Surely they help the economy.
As a student, you're not creating wealth, you're absorbing it or transferring it. Tax cuts help grow the economy because people that create wealth spend it, thus multiplying it's affects. What's more, tax cuts have the additional benefit in that people are more willing to generate wealth for themselves and for the government (in the form of taxes) when they know that if they do, they won't be hit by a punitive tax cut in the process. You're not actually generating wealth, just taking what the government gives you, so the net increase in your contribution would be zero.
I'm not trying to single out college students on Pell grants, because sure, they serve a role. But they will increase Congressional spending, with no correlating increase in revenues, because you don't contribute to the economy.
Don Corleone
11-08-2006, 23:11
Relax, Lemur. All Yesdachi was trying to say was that the first step in a political takeover is the Democrats have to blow a wad rewarding everybody that got them there. Maybe a year or two down the road they'll get fiscally conservative.
It doesn't matter, really. Now that Democrats are in charge of Congress again, the media will stop talking about the defecit every day and you'll forget about it. Now it's going to be an endless litany of all the people getting shafted because Congress doesn't spend enough.
yesdachi
11-08-2006, 23:15
I would imagine that raising teacher salaries would eventually be effective in raising quality of education.
As soon as teachers go on strike to better educate the students rather than to get more/better pay, benefits, retirement, etc. I will agree to increase their pay. Teachers (and administrators) have been given practically unlimited power to teach our kids and as a whole they have performed marginally at best, yet teachers are compensated far better than marginally.
Sweater vest wearing nancys. Don’t get me started!
Relax, Lemur. All Yesdachi was trying to say was that the first step in a political takeover is the Democrats have to blow a wad rewarding everybody that got them there. Maybe a year or two down the road they'll get fiscally conservative.
:yes:
yesdachi
11-08-2006, 23:17
oops
Yesdachi, I'm sorry I misunderstood your post. Apologies. And Doc C, thank you for pointing out my error and showing me the way back to civility.
I get too worked up on this issue.
Papewaio
11-08-2006, 23:35
Raising the federal mininum wage won't cost Congress anything directly, but it will slow the economy and reduce revenues available to tax.
It might reduce the total amount employed at the bottom end of the sector... but a lot of those jobs are heading overseas and/or by illegal immigrants who won't be effected by this law. Considering that unemployment rates are below 5%, this probably won't have any effect, as competition will favour employees and push up wages far faster then this effect.
Ending exploratory money for oil companies will definitely reduce the money Congress pays out each year, but it's going to raise the price of gas.
Record prices for oil will push exploration along at a high clip. Only time that you need to push exploration is when the current mines/oil fields cost of production is too close to the spot price... that is when they cut exploration staff to the bone... just like when I graduated as a geophysicist many moons ago. :wall:
AntiochusIII
11-08-2006, 23:35
As soon as teachers go on strike to better educate the students rather than to get more/better pay, benefits, retirement, etc. I will agree to increase their pay. Teachers (and administrators) have been given practically unlimited power to teach our kids and as a whole they have performed marginally at best, yet teachers are compensated far better than marginally.I'd like you to blame administrators first and teachers second, if you don't mind.
It's all about the system -- brilliant, great teachers often complain about the system on a regular basis, circumvent its many regulations when they could, and oftentimes produce students who are markedly more interested in their own education than most.
Moreoever, incompetent teachers can be fired at a trigger if the system is better. This, though, can also be blamed on the teacher's union; I heard some horror stories coming from the way of New York about useless, redundant personnel...
In fact, scratch the teachers to the third. Parents are up there competing for first spot with incompetent administration. You people (in general terms, of course, not you, yesdachi) are demanding stupid things and the ballot-interested politicians follow. Oh noes! The internet is eeevvviiil! Ban the useful sites from school computers! (Obscure porn passes through the filter mostly). Oh noes! The movie is offensive to my little Timmy! Everything above a G-rating by a censorship organization comes directly from hell; let's watch Clifford! Forget more controversial documentaries that actually have something to say! (Of course, teachers often take the risk and use their own initiative to show something useful...) Oh noes! The school is biased! Bring back Jesus and a crappy non-scientific theory! Oh noes! Teachers are giving my little Jenny too much homework! I'm gonna sue the school now!
:beam:
Also, according to Crazed Rabbit, private schools are the best, and what are private schools if not public schools with more money?Never gone to a private school have you? :laugh4:
I went to private (parochial) schools from K-12. Everything was underfunded, the facilities were old, IT was almost non-existant and the teachers were paid far less than equivalent public school teachers. Yet, I have no doubt at all that I recieved a better education than I would've in a public school.
The trouble with public schools is the complete lack of accountability. My parents obviously thought private schools could do a better job and decided not to send me to public schools- but guess what? We still have to pay for a public education plus the additional burden of private tuition. Even if I don't want to go to the school, they still get my money.
Sasaki Kojiro
11-09-2006, 07:47
Never gone to a private school have you? :laugh4:
Schools are different in different places apparently. Private highschools in cinci have heated floors for their locker room, and the public schools don't but offer just as good education. Depends on the school.
Samurai Waki
11-09-2006, 07:49
...well darnit, guess I'm gonna have to dish out 0% taxes on my paychecks when the Democrats come to power, and pay absolutely nothing for college cause I've already paid for it... oh, and I'm gonna be making around 10,000 less per year on my account...I hate my life. :furious3: :laugh4:
Sorry guys, I'm not feeling to sorry for myself.
Schools are different in different places apparently. Private highschools in cinci have heated floors for their locker room, and the public schools don't but offer just as good education. Depends on the school.
You've just made my argument. It depends on the school.
So what happens if you're stuck in an area that has lousy public schools and you can't afford a private education? You are S-O-L. There's absolutely nothing you can do about it. What if the school district a couple miles over is much better- can you go there? Heck no, they make that illegal. The funds should follow the student wherever they choose to go for education. If a school can't make the "grade" then they should go under.
Sasaki Kojiro
11-09-2006, 08:31
Hmm I guess it would kinda suck if you were out in the country with severe lack of choice. But hey, just move to the city, there's free market for yah ~D
I'm not a huge fan of the "schools as competing businesses" thing. Maybe I went through the college selection process too recently. Also, you know, if you introduce competition, you'll just get higher prices at private schools. Look at college tuition these days.
Prince of the Poodles
11-09-2006, 08:58
Hmm I dont think I understand.
If Clinton was running a surplus, how were we 20 trillion in the hole in 2000? Was he just not using that money to pay it back, or hadnt had enough time to pay it all off?
Is China in massive debt? What about our European equivilents? How long can a country operate with trillions of dollars in debt? Also who do we owe this money too!?
LoL ima little worked up. I can relate to the Lemur. :laugh4:
macsen rufus
11-09-2006, 12:49
Also who do we owe this money too!?
Isn't it China that's been buying up all your debts???:oops:
rory_20_uk
11-09-2006, 12:49
China has reserves of 1 trillion dollars, and has a massive trade surplus. The EU isn't a state in any sense of the word (except in that Somalia is a unified state). Different countries have widely differing debt levels.
Clinton did benefit from an upsurge in the economy. Bush has managed to start two wars which aren't cheap, start up several new plans for defence against a Soviet Russia which again isn't cheap, and finally decided that the Rich and companies pay too much tax.
the economy was due to contract, but Bush has managed to do little to help the country weather this, whist at the same time instigating measures to ignore and exacerbate the problem.
~:smoking:
yesdachi
11-09-2006, 15:51
I'd like you to blame administrators first and teachers second, if you don't mind.
It's all about the system -- brilliant, great teachers often complain about the system on a regular basis, circumvent its many regulations when they could, and oftentimes produce students who are markedly more interested in their own education than most.
Moreoever, incompetent teachers can be fired at a trigger if the system is better. This, though, can also be blamed on the teacher's union; I heard some horror stories coming from the way of New York about useless, redundant personnel...
In fact, scratch the teachers to the third. Parents are up there competing for first spot with incompetent administration.
I’ll put administrators first if you like, they are usually previous, current or future teachers anyway, but not parents and I’ll tell you why. Parents have recognized that they are not qualified to be “teachers” and have decided to pay to have someone qualified teach their children. That doesn’t absolve them of any responsibility (clearly parents that are involved in their children’s education have better performing children) but it doesn’t allow them to hold the authority over the children that the school does, the school/teacher sets the lesson plan and chooses the books decides what to focus on and what homework to give, the parent has very little to do with this but if a teacher or administer doesn’t like what they have to teach with they could strike just like they do when they want a better contract. Additionally, once a child is school age they spend more time at school than they do around their parents, the school and what goes on there is the #1 biggest influence on our children for 19+ years (some exceptions apply).
I think our school system is broken and some of the examples in NYC are extreme but are representative of the system. I don’t know how to fix it other than to stop using it until it goes away. It makes me sick to think I have a little one just starting out in the system, I soooo hope we get into the charter school we are on the list for, 40 openings and 80 applicants [fingers crossed].
Yesdachi, I'm sorry I misunderstood your post. Apologies. And Doc C, thank you for pointing out my error and showing me the way back to civility.
I get too worked up on this issue.
No worries, it’s an issue worth getting worked up about. ~D
yesdachi
11-09-2006, 16:22
Also who do we owe this money too!?
Back in the day Adrian gave a nice breakdown of who held the US’s $ markers, lots of Asian (China primarily) IIRC. Investing in a county shows several things thou and not just a desire to conquer them (insert evil laugh). It shows a confidence that they think the country is a good investment regardless of the current situation. Smart people invested in Exxon after the Valdese (SP) crash because they knew the company was strong and would bounce back (stock dropped to around $4/share and rebounded to $70/share in just a few years, nice ROI for investors who didn’t follow the popularity of the company).
I never understood this debt thing either. I understand that money is loaned and all that, but really, when will the world banks cease to lend? And once a workable, stable budget has been hammered out, who's to say that these debts won't simply be waived?
Canada is still paying off its debts from 80's, but it's a fraction of the US' debt, and we're running a surplus, so, it's not quite the same problem there. I'm looking forward to the day when the debt is no more and we can hopefully cut down some sin tax.
yesdachi
11-10-2006, 14:46
I never understood this debt thing either. I understand that money is loaned and all that, but really, when will the world banks cease to lend? And once a workable, stable budget has been hammered out, who's to say that these debts won't simply be waived?
Canada is still paying off its debts from 80's, but it's a fraction of the US' debt, and we're running a surplus, so, it's not quite the same problem there. I'm looking forward to the day when the debt is no more and we can hopefully cut down some sin tax.
I wouldn’t waive debt I loaned to someone unless they did something either real nice or beat me to a pulp.
The pain with all the US’s borrowed debt is that we have to pay interest on it.
I remember reading somewhere that the U.S. actually defaulted on its debt in the early 1800s, but now I can't find any reference to it. Hmm, maybe this is more of a Monastery question ...
rory_20_uk
11-10-2006, 16:30
Another factor to consider with debt is the interest rate that the debt incurrs. If it is low enough (i.e. below inflation), there is no incentive to pay it off, as in real terms the value of the debt decreases even with interest taken into account.
A government that pays off the debt might well be leaving the country in good financial state long term, but voters might get impatient with the failure of services to improve. Telling them that per year there will be more money in many cases is far less vote-worthy than leaving the debt and spending on things consumers can see.
~:smoking:
Good point, Rory, but think of the money that would be freed up for other kinds of investments. Money that is sunk into Treasury Bills isn't making new businesses, or funding research, or much of anything. When Gingrich/Clinton brought our budget into a too-brief surplus, other investments boomed. Just think of what would happen if we made a real dent in our debt.
I wouldn’t waive debt I loaned to someone unless they did something either real nice or beat me to a pulp.
My point exactly. Not many people can afford to really 'beat up' the US unless terrorists are involved and even then, such an extortion scheme wouldn't work very well in the eyes of the world...but I'm getting off on a tangent here. The point is that there isn't much leverage that anyone can really put on the US to force them to repay the debt.
The first line is depressing. The second line is hilarious. If Don C is lost in a German art film, this headline makes me feel like I'm wandering through a piece of Dada experimental theater ....
Hey, I'm the guy who said he feels like he's lost in a German art film! Personally I'm hoping this is all a bad dream and I wake up and find myself in one of those Italian art films from the same period... :gorgeous: :eyebrows: ~:flirt: :gorgeous:
Truth be told I think Don C feels like he should be somewhere on an interstate racing towards Vegas, white knuckled and hell bent on a weekend of glorious self indulgence; a brief respite from the blackened skies looming in the distance...
The scary thing about 'more money for education'? There's relatively little correlation between the amount of money spent per student and how well students do in school. If more money actually worked, I would actually support it. But Western states (Utah, Colorado, New Mexico) spend less per student than Southern states (North Carolina, Alabama) but they do markedly better. States in the Northeast have not kept up in growing the per-student spending, falling to the upper third from the top, but their test scores remain top of the list.
The problem with education in America is the NEA. Plain and simple. They don't want to require teachers to do their jobs, and incompetent teachers get rewarded along with the good ones (and there's plenty of those). Add to that so much class time is taken up with enacting social policy these days, it's very hard for teachers to actually teach.
Quit with the "social experiments" like the schools out in California making kids pretend to be Muslims for a month, and teach the 3Rs.
I understand what Dems say about standardized tests, that in the end, kids learn how to take a standardized test, not a real education. But by any yardstick, we are failing our children miserably, and if vouchers aren't the answer, fine, propose one. But "let's just give the schools more money and hope the problem goes away" is a recipe for more failure. If schools really need more money, then lay it out and explain how it will improve student performance. But don't just handwave with 'more money for education'.
Absolutely!
I would imagine that raising teacher salaries would eventually be effective in raising quality of education.
Also, according to Crazed Rabbit, private schools are the best, and what are private schools if not public schools with more money?
What? You mean like the teacher salaries in NYC? LOL! Our teachers are extremely well paid and yet our public schools are awful! Paying teachers well is one thing, holding them to high standards is another. It is extremely difficult nowadays to find truly qualified teachers and the ones that do pass the muster are easily discouraged from sticking around because the latest generation of students are spoiled silly and behave like animals in class. I've met numerous private and parochial school teachers who used to teach in public schools but left because could not handle the stress and agitation. Most preferred a massive paycut in exchange for a a more rigidly disciplined environment and a less stressful existence. To pad their income these people will get part-time jobs (preferably off-the-books types like bartending). No amount of money is going to improve America's public schools because the problem begins with the students and their upbringing and ends with a curriculum that is muddled with too much social engineering and not enough basics.
Private & parochial schools are, for the most part, better than public schools because they are devoid of the sticky issues and personnel that can plague every government institution. Private schools can set their own agenda and with the exception of Catholic schools, do not have to answer to a centralized bureacracy regarding curriculum or anything else.
Hey, I'm the guy who said he feels like he's lost in a German art film!
Ooops! Sorry I misattributed that line; it was good enough to make an impression on my tiny lemur brain. I can see why you feel that way. There's something mean and spiteful in a universe where Hillary Clinton is your and Gawain's Senator ....
Productivity
11-12-2006, 07:44
I remember reading somewhere that the U.S. actually defaulted on its debt in the early 1800s, but now I can't find any reference to it. Hmm, maybe this is more of a Monastery question ...
I remember seeing a reference to this once in one of my macro texts, but I went looking for it (for Don C if I remember correctly) but never could find it - I'll have a look again a bit later.
I remember reading somewhere that the U.S. actually defaulted on its debt in the early 1800s, but now I can't find any reference to it. Hmm, maybe this is more of a Monastery question ...
I believe that it happened during the time period around 1840 and was several states not the federal government. An article that links to a book about the subject.
http://links.jstor.org/sici?sici=0002-8282%28199603%2986%3A1%3C259%3AUTCOSD%3E2.0.CO%3B2-Q&size=LARGE
In the debt record, there was an oddity around 1835 when the debt dropped from over $4 million to just $33K. In 1837 it was $37K, then up to $336K in 1838 and then back up to $3 million by 1839. I couldn't find a reason for the huge decrease in debt from 1834 to 1835. Except for 1835-1837, every other year since 1791 the debt has been in the millions. The national debt has gone up every year since 1929.
http://www.publicdebt.treas.gov/opd/opdhisto1.htm
Ah, upon further digging it seems the U.S. Congress debated and finally passed a bill in 1834 to pay off the national debt. That is why it shrank. Of course, the next year it sprang right back up again.
I can't find anything suggesting that the government defaulted on the debt. Perhaps it's some kind of urban legend?
Edit: Redleg posted while I was in the midst of compiling all this and happily surfing the net into all sorts of odd corners (I got side-tracked by the whole issue of Andrew Jackson and the 2nd Bank, which was occuring at the same time as the debt payoff). I defer to Redleg's post. It does seem reasonable the the various state defaults of the 1840's was the genesis of the story. I wonder how much of that 1840's problem was the result of the U.S. Treasury surplus of the late 1830's having been re-distributed to the states, leading to massive speculation and economic turmoil.
yesdachi
11-13-2006, 17:34
What would be the repercussion if the US started really (like a 10-20 year plan to be debt free) paying off its debt? Would other countries that held our debt get rich as heck?
Vladimir
11-13-2006, 22:55
OK stop :stop: , time out. How did this thread devolve into a debate on education without even mentioning the difference between discretionary and mandatory spending?
But first...Lemur: Yes we can talk about it all you'd like but if you think we're going to do anything about it :laugh4: ad infinitum.
The point is that the only part of the budget that can directly be controlled each year is so small that no changes we can make to it will make much difference. I don't have the numbers but I believe that this type of spending, Discretionary spending as it's called, is less than half the budget. The largest part of this budget (I think...GAH! Where's Ross Peroit when I need him?, Strike, Tex...you guys know where he is?) is military spending which you're not going to be able to cut (again) for quite a while.
Mandatory spending: Social security, Medicare, Medicaid, interest on the national debt; cannot be changed (directly) in the budget which means that it’s Mandatory spending. The only thing you can do is adjust the type of bonds you use to finance the debt. Any other option involves cutting back benefits.
The problem with the deficit is :drummer:
OLD PEOPLE!
Old people vote in droves, old people get money for getting old, old people (who aren’t really that old by the way, 67) consume (an increasingly) large part of the mandatory spending. You can’t change it because, yes, it’s undemocratic (meaning that it’s career suicide for politicians).
The only way out of the problem is to grow your way out of it, and that’s something that won’t happen with (modern) Democrats in power. Someone feel free to mention the “surplus” of the 90’s…a bubble economy coupled with a gutting of the military is not sound economic policy. Another trick used in the 90's was to adjust the type of bonds used to finance the debt (see above). This created a short term reduction but a long term increase in the debt/deficit.
Seamus Fermanagh
11-14-2006, 04:00
Mandatory in that it is political suicide to alter them in any significant fashion = yes -- I discussed that above.
The only real means of reducing the deficit is, therefore, to reduce the budget for the military.
To accomplish this, withdrawal from Iraq and turning over most of the responsibilities in Afghanistan to the UN will be necessary. Pressure is already being applied to effect the former and the denial of Bolton's confirmation will clear the way for a less "The UN is useless" ambassador to be emplaced. Fully shifting responsibilities in Afghanistan will have to wait for a new administration, probably, but with the logistics involved in a draw-down in Iraq, that's probably a wise course anyway.
This is, by the way, the will of the people of the USA -- at least those who got off their duffs and voted. Fighting them "over there" has been evaluated as too costly in lives and treasure without producing a quick enough/decisive enough measure of success.
Vladimir
11-14-2006, 15:52
Mandatory in that it is political suicide to alter them in any significant fashion = yes -- I discussed that above.
The only real means of reducing the deficit is, therefore, to reduce the budget for the military.
To accomplish this, withdrawal from Iraq and turning over most of the responsibilities in Afghanistan to the UN will be necessary. Pressure is already being applied to effect the former and the denial of Bolton's confirmation will clear the way for a less "The UN is useless" ambassador to be emplaced. Fully shifting responsibilities in Afghanistan will have to wait for a new administration, probably, but with the logistics involved in a draw-down in Iraq, that's probably a wise course anyway.
This is, by the way, the will of the people of the USA -- at least those who got off their duffs and voted. Fighting them "over there" has been evaluated as too costly in lives and treasure without producing a quick enough/decisive enough measure of success.
Ok, I just spent the last 5 minutes looking "above" and couldn't see your other post.
I disagree with your assessment about Bolton: He's much less "The UN is useless" and more "The UN needs reform" which is nigh impossible to argue against.
As far as a reduction in military spending being the only "real" solution? Politically feasible is a more correct term, but not very practical. What’s total military spending per annum? Half trillion? My God, what’s the national debt up to? Doesn’t payment on the interest alone cost about two thirds as much as the entire military?
Seamus Fermanagh
11-14-2006, 20:47
Sorry Vlad. The post must have been in another thread, or one of those I failed to hit submit on.:oops:
I agree with you about Bolton, but he's gonna go down. The exiting liberal Republican from Connecticut is going to vote with the Dems on this and he will be rejected -- for precisely the reason I listed (valid or not).
The Democrats, when it comes to spending reductions, very much have the Clinton model in mind. He did balance the budget, using a combination of small tax increases (mostly of the hidden kind), substantial military spending reductions, and a solid economy. This (if any) is the model for fiscal responsibility that we'll see coming out of Congress and the one with which Bush will have to contend.
I don't like it, and think it stupid, but that's the way I read the tea leaves.
Best quote (http://www.lewrockwell.com/paul/paul351.html) I've yet read on the subject:
Are ever-growing entitlement and military expenditures really consistent with a free country? Do these expenditures, and the resulting deficits, make us more free or less free? Should the government or the marketplace provide medical care? Should younger taxpayers be expected to provide retirement security and health care even for affluent retirees? Should the U.S. military be used to remake whole nations? Are the programs, agencies, and departments funded by Congress each year constitutional? Are they effective? Could they operate with a smaller budget? Would the public even notice if certain programs were eliminated altogether? These are the kinds of questions the American people must ask, even though Congress lacks the courage to do so.
Required reading: Our Nation's Fiscal Outlook: The Federal Government's Long-Term Budget Imbalance (http://www.gao.gov/special.pubs/longterm/).
Best quote (http://www.lewrockwell.com/paul/paul351.html) I've yet read on the subject:
Are ever-growing entitlement and military expenditures really consistent with a free country? Do these expenditures, and the resulting deficits, make us more free or less free? Should the government or the marketplace provide medical care? Should younger taxpayers be expected to provide retirement security and health care even for affluent retirees? Should the U.S. military be used to remake whole nations? Are the programs, agencies, and departments funded by Congress each year constitutional? Are they effective? Could they operate with a smaller budget? Would the public even notice if certain programs were eliminated altogether? These are the kinds of questions the American people must ask, even though Congress lacks the courage to do so.
Required reading: Our Nation's Fiscal Outlook: The Federal Government's Long-Term Budget Imbalance (http://www.gao.gov/special.pubs/longterm/).
Good ol' Ron Paul. A dedicated Libertarian. Are you turning into a Libertarian on us, Lemur? :wink:
How much you trust corporations and corporate capitalism might determine where you end up. I'll welcome you with open arms to the libertarian socialist (aka anarchist) side of the big tent which is utter distrust of government. :smile:
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